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Aug. 26, 2021 Source: blog by Gary Schnitkey, Krista Swanson, and Nick Paulson, Department of Agricultural and Consumer Economics, University of Illinois and Carl Zulauf, Department of Agricultural, Environmental and Development Economics, Ohio State University To view the complete report, click here. llinois Crop Budgets for 2022 corn and soybeans were released in July (see farmdoc Daily, July 27, 2021). Positive returns are projected for both crops given a $4.25 corn price and $12.00 soybean price, both of which are significantly above prices received from 2014 to 2019. We provide stress tests of corn and soybean returns under lower prices which could result for a variety of reasons including acreage responses. A return to 2014-2019 prices would result in meager incomes, and possible pressures for another round of ad hoc Federal payments. In two scenarios of lower prices, corn returns are much lower than soybean returns, suggesting there is more risk to growing corn than soybeans in 2022. Commodity title payments from Agriculture Risk Protection (ARC) and Price Loss Coverage (PLC) programs do not protect against the possibility of negative farm returns. 2022 Average Returns We modified the crop budgets released in July to account for new information about yields, prices, and cash rents. Table 1 shows revised budgets with three modifications from the same table in the July 27, 2021 farmdoc daily: 1. Yields for 2021 were increased due to USDA estimates of state yields released on August 12, 2021. USDA estimated Illinois yields at 214 bushels per acre for corn and 64 bushels per acre for soybeans. Both those projected yields are at record levels. As a result, the 2021 corn yield in the budget was increased from 222 bushels per acre to 235 bushels per acre. Likewise, soybean yield was increased from 69 bushels per acre to 73 bushels per acre. 2. Soybean prices were lowered given declines in futures prices and forward delivery prices. For 2021, soybean price was lowered from $13.60 per bushel to $13.00 per bushel. For 2022, the projected soybean price was lowered from $12.35 per bushel to $12.00 per bushel. 3. Cash rents were increased based on state rents released by USDA. From 2020 to 2021, state rents increased by $5 per acre. As a result, cash rent for high-productivity farmland in Central Illinois was increased by $5 per acre to $284 per acre. The 2022 projected cash rent was increased to $293 per acre, the same as the highest cash rent set in 2014.
Farmer returns are shown in Table 1 for cash rented farmland, with the cash rent set at average levels. Cash rents can vary significantly from parcel to parcel, so returns will vary across parcels. In 2021, farmer return is projected at $343 per acre for corn and $294 per acre for soybeans. For 2022, farmer return for corn is projected at $20 per acre for corn and $122 per acre for soybeans. Tweet |
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